Justice Department calls Microsoft proposal 'ineffective'

May 11, 2000
Web posted at: 3:16 a.m. EDT (0716 GMT)

From Correspondent Terry Frieden

WASHINGTON (CNN) -- The Justice Department says Microsoft's response to a government plan to break up the company, outlined by Microsoft in a court filing, is ineffective and would not repair damage to its competition.

"Microsoft's proposal is ineffective and filled with loopholes. It would not have prevented Microsoft from engaging in many of the illegal acts found by the District Court, nor would it prevent the company from using its monopoly power in the future to engage in the same kind of illegal behavior to crush new innovations," the Justice statement says.

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"For example Microsoft's proposal would not prevent: attempts to divide markets with competitors; retaliation against PC manufacturers and software developers that support non-Microsoft technologies; or using tying to require PC manufacturers to ship other Microsoft products with Windows.

"In sum, the proposal fundamentally fails to repair the damage to competition caused by Microsoft's illegal acts, or prevent Microsoft from committing similar violations in the future.

"In contrast, our proposal would address the serious violations found by the court, and it would do so by stimulating competition and innovation, leading to better products and lower prices for consumers. If our proposal is adopted, neither the government nor an entrenched monopolist would decide what is best for consumers," the government statement.

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